20/20 VISION

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Four futurists offer up scenarios that could define consumer behavior and consumer markets in the next two decades. We throw in some data to back up their claims. Then the real-world practitioners chime in.

Staying ahead of the future isn't for the faint of heart. Despite the minute-by-minute information glut, businesses can have a hard time keeping up with "what's now," let alone with "what's next." Even for the most intrepid of the demographic sleuths known as scenario planners and futurists, sizing up the long view can be like an extreme sport.

"The future is a convergence of forces and discontinuities - or wild cards - that drive change," says futurist Ryan Mathews of FirstMatter, a consulting firm based in Westport, Connecticut. "No one was smart enough or creative enough to predict that in the 1960s, when we were preaching `free love' in Golden Gate Park, that only 30 years later we would have the `new celibacy.' That's the result of a wild card."

But in today's fluid, fast-changing business environment, understanding the trajectory of consumer trends - and identifying the potential wild cards that can skew that course - can mean the difference between riding the wave and getting buried by it. American Demographics asked Mathews and three other futurists to offer a scenario for how current patterns may evolve by the year 2020, and discuss what that will mean for marketers as they plot their business plans for the next century.

E-POWER SHIFT

Teresa Duke of Medina, Ohio, calls herself a "21st-century techno-wannabe." First thing every morning, the 35-year-old heart-transplant coordinator and single mother goes online to check her e-mail and stock quotes, read some news, and tune into streaming radio as she sits down with her first cup of coffee. Like most professionals, Duke is strapped for time. She does the majority of her shopping via the Internet: clothes, contact lenses, books, even skateboarding shoes for her 17-year-old son, T.J. She's purchased plane tickets and made hotel reservations on the Net, and never plans on calling a travel agent again.

"I live in the dot-coms," Duke says. When it came time to buy a new car, she turned to her trusty computer. She accessed 80 research sites, queued up the online loan calculator, and ultimately decided on a 1999 Honda Civic. Then she e-mailed four Internet car-buying services with her choice, and wound up going with Autobytel.com for two simple reasons: speed of download and online photos of the car she wanted. "No way will I ever again listen to a car dealer's spiel," says Duke.

Techno-wannabe? Duke is actually on the forefront of what Greg Schmid of The Institute for the Future calls the "sophisticated consumer": an educated, wired professional with some significant disposable income. She is also pressing the need for what Steve Barnett, a senior partner with OgilvyOne and an e-commerce professor at the Wharton School, calls "business transparencies" - the breaking down of barriers between consumers and the products and services they desire. Personalized, individualized, customized, these transparencies will give the consumer substantial leverage by the year 2020.

"This is about power being shifted to the consumer," Schmid says. "People have access to information from a variety of channels, and they are going to use those channels." Duke and her cohorts currently account for about 20 percent of the American public, according to an analysis by the Institute for the Future that seeks to quantify the impact of educational attainment, technological sophistication, and discretionary spending power. By 2020, Schmid says, when Duke is 55-years-old, these sophisticates will make up about 60 percent of the American buying public.

While e-commerce and the e-consumer are still evolving, the foundation for the future is already cemented, says Barnett. Today, there are almost 200 million people on the Internet worldwide; in the United States alone, 80 million. "I think it's going to be extremely important for companies in the future to personalize and target their products to individuals, rather than demographic stats," says Rosi Ware, president and CEO of marketing giant Millward Brown's Americas division. Because nearly every company and every consumer is going to have every available technology, "companies are going to have the opportunity to know their markets better and consumers are going to know those companies better."

CONFLICT OF INTEREST

But availability is not the same as access. America is becoming a nation of "new immigrants," says Mathews of FirstMatter. More than 13 million people arrived between 1900 and 1914, but as the century ends, the country is in the midst of another immigration boom.

According to the U.S. Census Bureau, more than 25 million current U.S. residents - nearly 10 percent of America's population - were born elsewhere and 43 percent are of Hispanic origin. Nationwide, there are approximately 30 million native and non-native Hispanic residents, and the number is expected to grow to 53 million by 2020. And they will be younger than average. By 2020, the median age of Hispanics will be 28.8, versus 37.6 for the total population.

"We are a geriatric nation sitting on top of a pediatric nation, both in terms of geography and demography," says Mathews. In 20 years, he says, instead of closing the border between the United States and Mexico, we're going to be inviting people to come here to take the jobs "that we just don't want."

Organizations like the AARP are already gearing up for the boom in the aging population and the new wave of immigration, says John Rother, the group's director of legislation and public policy. "What we have to do is equalize the technology skills among workers," he says. Young people immigrating from Mexico, for example, don't have the technology skills that are in demand." Both Rother and Mathews say the disparity between the techno-haves and have-nots is troublesome. "People who don't have the skills are the ones who don't have the money. It's a classic hourglass economy," Rother says.

California-based JAX Market is working to level that technological playing field for its workers and customers. The market chain, which has been in business since 1964 and has stores in Anaheim, Santa Fe Springs, La Puente, and Ontario, California - all with large Latino immigrant populations - has made it a priority to get involved in the communities in which it operates, often through local school systems and churches. In the past year alone, the company donated thousands of dollars to area schools for computer upgrades, as well as books to schools and local civic organizations. And because many recent immigrants lack transportation, the company provides shuttle services to and from the market for its customers and employees.

Bill Macaloney, chairman and CEO of JAX Market, says it's a "win" situation for everyone. "You need to have a real understanding of your customers' and employees' needs beyond the obvious offerings of your company," he says. "We needed to do more for our community than just sell food."

Diane Soto, 27, born in Culiacan, Mexico, emigrated to the United States nearly ten years ago. The part-time college student now works full-time as director of management information systems for the JAX chain. "When I came to the U.S., I didn't speak a word of English," she says. "In my country, there's no computers at all unless you're rich and go to a private school." Soto, who now makes more than $40,000 a year, began working as a "bagger" at a JAX Market seven years ago and worked her way up. "This is a company that inspires loyalty among its workers and its customers," says Soto. "We call it the el patron philosophy. And we are loyal to our patron."

IT'S BANDWIDTH, BABY!

How much will access to technology matter? Plenty. Much of the Net's permeation into our lives is a result of increasing bandwidth or "essentially speed," says Barnett. And that means everything from dealing with the "car guy" to the insurers and repair people who will maintain that car.

"Put on a pair of sunglasses, or push a button, and contact your virtual insurance adjuster right after the accident. Or better yet, have your car contact all appropriate parties," says Jay Siegel, a research fellow at the Allstate Research and Planning Center in California. "It sounds like The Matrix but it's not that farfetched."

According to Siegel, the structure of the insurance industry may not change that much, since there will always be a need for people who are knowledgeable about the product. "But there will be a continual elimination of the middleman," he says. "Everybody wants everything faster, with the hassle factor kept at a minimum. That implies a democratization of business. The factory walls will be broken down. And any business that is going to survive needs to keep that dictum in mind."

Offering consumers hassle-free automotive claims adjusting, for example, may seem like a dream right now, but some companies are already planning for the future. At Chicago-based CCC Information Services Inc. - a supplier of software and communications systems to more than 13,500 collision repair facilities and 350 insurance companies - company execs want their clients' appraisers to work faster and be more productive, and make their customers happier.

The company has partnered with Minneapolis-based ViA, Inc. to deliver a wearable computer designed specifically for claims field inspectors and collision repairers. Created in response to requests for a portable PC product that is usable both indoors and in direct sunlight, the new technology allows collision estimates to be developed immediately as the estimator, wearing a four- to five-pound vest with a pen-enabled, sunlight-viewable touch screen, a digital camera, and other peripherals, simply walks around the vehicle, assessing damage. Instead of taking notes at the site and then sitting down at an office computer to complete the paperwork, the appraiser can make the estimate at the car and hand a printed copy to the vehicle's owner immediately, says Bob Chomko, CCC's vice president of research.

"All this technology ultimately needs to be customer-based and customer-focused," he says. "Information on damage and repairs, for example, needs rapid response. People want their cars back in pre-accident condition as quickly as possible."

Chomko concedes that come 2020, this wearable PC may look as dated as a Commodore 64. "But the principle will stay the same: A seamless stream of information - from the insurer to the customer, to the manufacturer, to the supplier, to the repair shop - is going to be the business norm. Cycle times just continually need to be reduced."

No business knows the need for customer satisfaction better than the banking and finance industry, especially in the environment of virtual finance and trading.

"What's not going to change in 2020 is the fact that everybody will still want to be rich," says David X. Martin, a former director of Citibank who has opened his own boutique investment firm, Knightsbridge Capital Management, in New York City. While many people still go to a broker for advice, Martin believes that online financial advice and banking is the industry of the future. The numbers tell the story. According to the latest research by Jupiter Communications, American investors had $415 billion invested in online brokerage accounts at the end of 1998. By the end of 2003, those assets will grow to a staggering $3 trillion, as 20.3 million households adopt the online trading habit. At the same time, 25 percent of U.S. banking households - 26 million of them - will manage their bank accounts online, up from 3.8 million users today. By then, 16 percent of home buyers may also be finding their mortgage on the Web, Jupiter reports. But a key to the growth is for financial se! rvices firms to keep the bugs ou t of their technology and provide better customer service: a real human now, or a virtual person come 2020.

"What you're going to have is a next-generation product," says Martin. "Bankers and brokers are going to have to personalize their services even more. The guy that you used to visit in the office is now going to be on the Web site, and customers are going to go to the Web site that they feel most comfortable with."

MIND YOUR ELDERS

Few people doubt the coming of the geriatric nation. In 1994, the "oldest old" - 3.6 million Americans aged 85 and over - represented a little more than 1 percent of the U.S. population. By 2020, the total is expected to double to 6.5 million. And by 2030, about one in five Americans will be over the age of 65, according to the Census Bureau, many with more than three decades of living ahead of them. Some projections indicate that the centenarian population could explode to more than 4 million by 2050, up from an estimated 70,000 today.

One of the things we aren't doing, however, is "aging gracefully," says generational expert Susan Mitchell. "Both men and women are fighting the appearance of aging, and I think we're really going to continue to do that." Mitchell counts herself among the boomer generation that will "fight the aging process every step of the way."

"By 2020, there's only going to be so much that we can do. There's certainly not going to be any magic bullet that will completely reverse the aging process. But I think the big markets will be in products and services that help keep us vital, youthful, and young at heart."

Greg Pomerantz, vice president of marketing for Minneapolis-based Miracle-Ear, is counting on the fact that vanity may indeed be the last thing to go."We are riding the wave of an aging population. Twenty years out is a long time in this business, but we're counting on the fact that as boomers age, they will want every bit of technology that will improve and enhance their lives," he says.

Hearing-aid market penetration has actually declined from 23.8 percent to 20.4 percent from 1984 through 1997, Pomerantz notes. "We have an aging population that clearly needs help, but nobody wants to address hearing loss. Baby boomers, however, have consistently done anything and bought anything to satisfy their needs, wants, and desires. We're counting on the fact that selfish baby boomers like me will want to hear as we age. But we're definitely going to have to leverage the technology. It's going to have to be more than just a hearing aid. Maybe an instant translator and a phone, as well as a hearing device. That would be the way to go."

Enhanced telecommunications and computing power will also unite health care providers with patients in a virtual seamless system, according to PricewaterhouseCoopers' HealthCast 2010 report. Increasing uses for the Net will erase one of the biggest handicaps of the health care industry today - relay speed. Making referrals, getting test results, finding patients for clinical trials, and sharing cost information will be done through a click of the mouse.

"Virtual" treatment will be the norm, says Dr. Joseph Rosen of Dartmouth-Hitchcock Medical Center in New Hampshire. "It's not unreasonable to think that as the technology gets better, more robust and more agile, physicians and their patients won't even need to be in the same room with each other, let alone the same continent."

Eventually, Rosen says, through the use of virtual reality and telecommunication capabilities, a surgeon's movements will be translated into computer-guided movements of high-tech robotics. Conceivably, that means a surgeon in New Hampshire could operate on a California patient in real time.

Diagnostics and treatment will also be upgraded. Physicians will have access to computer images of patients, accessed by simple scanning devices, that go beyond a 3-D visual representation. "What we have now is really nothing more than a three-dimensional picture of the body," says Rosen, referring to the Visual Human Project of the National Library of Medicine, which provides data for the testing of medical imaging algorithms. "But in the future, this data will be further refined. Treatments...will be tailored to an individual's biologic makeup."

Despite increasing uses of such medical-based technologies, Mitchell believes the one threat we have to longevity is the emergence of new drug-resistant diseases like AIDS and resistant strains of "older" diseases like tuberculosis. "These are diseases of the poor. To the degree that the population of the poor increases, it's not unlikely that we'll have epidemics that will potentially affect overall longevity in this country, despite technological innovations," she says.

Years ago, Mitchell says, she would have called these potential diseases "wild cards," but now she feels they are "certainties."

"Medicine has had a cavalier attitude toward antibiotics," she explains. "Nobody was willing to take it seriously enough, and now we have diseases that are resistant to antibiotic treatment."

While modern medicine will certainly have an impact on how long we live, we still need to consider how we live, says Ken Dychtwald, author of Age Power: How the 21st Century Will Be Ruled by the New Old (J.P. Tarcher, 1999). Currently, 40 million retirees spend an average of 43 hours a week watching television, he points out. The "new old" will need to integrate more fully into society, with opportunities created that focus on intergenerational leadership, social contribution, and productivity. Otherwise, he says, we stand the chance of creating a future in which "70 million couch-potato retirees drift through their mature years watching TV, surfing the Net, wandering through malls, and playing various games while siphoning off society's resources."

Stewart Brand, cofounder of the Global Business Network and author of The Clock of the Long Now, says the generational aspects of a continually aging population are "what's really interesting. In the future, people will know their great-great grandchildren, and hang out with them, and learn things from them. It will be a different sense of family. Maybe it will be dreadful. Maybe it will be cool."

"The bonds between immediate family generations may loosen," Brand adds, "while the overall bond among humanity's generations becomes stronger, simply because so many generations are sharing the same world - having direct experience of the `Long Us.'"

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